FY22/3 Q1 Corporate Presentation. August 5, 2021

(1)

August 5, 2021

FY22/3 Q1

(2)

(3)

FY22/3 Q1 Overview

◼

Took actions to reduce the impact of the global semiconductor shortage and

reduce the risk of production & order declines by working to stabilize supplies

and sign long-term stable supply agreements with major chip suppliers

◼

Further cut fixed & variable costs, with operating loss coming in significantly

below forecast

◼

Signed agreement to sell Taiwan manufacturing subsidiary to world-class

Taiwanese EMS to strengthen JDI competitiveness & drive growth

◼

Reinforced capital via Ichigo Trust exercising additional stock acquisition rights on

July 30

◼

Received TSE notification of JDI meeting listing criteria for new TSE Prime Market,

(4)

Revised up full-year sales forecast on reduced impact of semiconductor shortage,

increased customer demand, & higher JDI product pricing

Upward Revision of Full-Year Sales Forecast

JPY

254.0 bn

JPY

280.0 bn

Previous Forecast

(May 14)

Revised Forecast

（August 5）

(5)

Declining smartphone LCD demand in Mobile in sharp contrast

to growing Automotive & Non-Mobile demand

Market Environment

Non-Mobile

• Strong demand for OLED wearables and ultra-high-

resolution LCD VR (primarily games)

reflecting

growth in health monitoring and lifestyle changes

☁

☀

☁ ☁

Mobile

(US/Euro)

• Declining demand for LCD smartphones

on major

customer OLED expansion

Current

Forecast

☀

Mobile

(China/Other)

• Strong demand for LCD smartphones

, as share of

Chinese makers globally, incl EU & US, grows

☁

☀

☁

Automotive

• Rebound from 2020 demand slump but continuing

semiconductor shortage –

JDI continues to lead in

(6)

KOE Sale: Increase Competitiveness & Capital Efficiency

July 8, 2021

Signing of Term Sheet with

Wistron Group

Aug to Sep, 2021 (expected)

Signing of Share Purchase

Agreement

Sep to Dec, 2021 (expected)

Sale completion

(upon obtaining

approvals from relevant authorities)

• JDI will continue to outsource module

assembly to KOE

• KOE's industrial display design & sales

divisions will remain with and be

integrated into JDIT

• Grow JDI businesses via synergies with

Wistron Group (Expand automotive &

industrial businesses in China, etc.)

◼

Strengthen the competitiveness of JDI core automotive & industrial business and increase cost

competitiveness of Taiwan manufacturing subsidiary KOE

◼

Shed assets and convert fixed costs to variable costs, increasing JDI operating flexibility, ability to respond

quickly to changes in market environment, core earnings power, and capital efficiency

JDIT

JDI

Displays

(multi-product)

Sales

Industrial

displays

Design & Sales

100% subsidiary

Wise Cap

WOK

Mobile

displays

Manufacturing

Wistron

New KOE

（name tbd）

Automotive & Industrial

displays

Manufacturing

100% subsidiaries

100%

subsidiary

Outsource

JDI Japan Display Inc. JDIT JDI Taiwan Inc.

KOE Kaohsiung Opto-Electronics Inc. Wistron Wistron Corporation

WOK Wistron Optoelectronics (Kunshan) Co., Ltd.

(7)

Ichigo Trust Equity Financing

(Exercise of 12th Stock Acquisition Rights)

◆Exercise Details

◆Ichigo Trust Shareholding

34.4

51.0

70.4

16.6

19.4 7/30

exercise

(JPY billion)

Unexercised

Amount

Outstanding

shares

No. of shares

(K shares)

No. of voting

rights

(K)

Ichigo Trust

ownership

Common

846,166

8,461

Class B Preferred

672,000

6,720

Yes

0.5

0 Yes

3.6

0 Yes

Total

15,181

Ichigo voting rights

44.26%

N/A

Additional JPY 16.6bn Exercised, Unexercised Amount JPY 19.4bn

Rights exercised

12 _{Rights (issued Aug. 2020)}

th

Stock Acquisition

Total amount

JPY 55.4bn

Exercise date

July 30, 2021

Exercise price

JPY 10mn/share

Exercised amount

JPY 16.6 bn

Class of shares issued

Class E Preferred Shares

Unexercised amount

JPY 19.4bn

Class D Preferred

Class E Preferred

(‘21/6)

Net Assets

(‘21/7)

Net Assets

(Post-Exercise)

Net Assets

(8)

PersonalTech

(9)

(10)

FY22/3 Q1 Financial Results

◼

Due to lower mobile display demand, sales

decreased by JPY22bn YoY, of which JPY8.8bn

was affected by the chip shortage. However,

relative to the May 14 forecast, sales were +JPY

2bn

◼

Due to cost cuts, the operating loss shrank by

JPY1.1bn. Excluding the impact of the chip

shortage, it improved by JPY4.2bn. Also, was JPY

2.9bn above forecast

◼

Ordinary loss and net loss also shrank due to

phasing out asset maintenance costs

(non-operating cost) related to the Hakusan Plant and

restructuring costs (extraordinary loss)

◼

EBITDA –JPY 3.7bn due to lower depreciation

costs, but improved by JPY 2.6bn excluding the

impact of the chip shortage

Sales lower YoY, but earnings improvement due to cost reductions

• Net income represents quarterly net income attributable to owners of JDI.

• EBITDA＝Operating Income + Depreciation (operating costs) + Amortization of goodwill

(JPY billion)

FY21/3

Q1

FY22/3

Q1

YoY

Sales

88.0

66.0 -22.0

Gross Profit

1.0

1.4 ＋0.4

Operating Income

(7.0)

(5.9)

＋1.1

Ordinary Income

(8.8)

(6.4)

＋2.4

Net Income

(16.3)

(7.0)

＋9.3

EBITDA

(3.2)

(3.7)

-0.5

Excl. chip shortage impact

Sales

88.0

74.8 -13.2

Operating Income

(7.0)

(2.8)

＋4.2

(11)

Quarterly Sales by Product

11.5

15.0

14.8

20.9

6.3

8.7

55.4

21.4

88.0

66.0 FY21/3 Q1

FY22/3 Q1

Mobile (US/Euro)

Mobile (China/Other)

Automotive

Non-Mobile

Sales by Product

(JPY billion)

46%

70%

◼

Mobile（YoY -51％、QoQ +1％）

• Orders fell sharply YoY due to increased customer

use of OLED for smartphones (sales up slightly

QoQ); Mobile % of total sales now <50%

• Shipments to US/Euro exceeded expectations by

JPY 3.1bn

◼

Automotive（YoY +41％、QoQ -17％）

• Although impact of chip shortage exceeded

expectations (sales JPY 2.1bn below forecast),

sales increased sharply YoY, as last year saw a

large fall due to Covid-19

◼

Non-Mobile（YoY ＋30％、QoQ +6%）

• Sales up YoY due to increased orders for

wearable OLED displays & VR ultra-high-res

LCDs (also up QoQ)

• Higher VR shipments drove sales JPY 2.0bn above

(12)

Operating Income +/- Factors

✔ Lower inventory writedown,

etc.

FY22/3 Q1 Operating Income +/- Factors（YoY）

Manufacturing

Fixed Cost

SG&A

Other

Operating

Loss

FY22/3 Q1

(5.9)

Sales 66.0

FY21/3 Q1

(7.0)

Sales 88.0

（JPY billion)

✔ Lower dep. cost due to fixed assets writedown

JPY 1.2bn

✔ Other cost reductions

JPY 1.3bn

Operating

Loss

Shipment

Vol. &

Product Mix

◼

Negative impact of lower sales

was offset by lower costs due to

improved yields and cost

reductions & decreased

(13)

Revised FY22/3 Full-Year Sales Forecast

◼

Full-year sales forecast revised

upward by JPY 26bn (+10%), of

which JPY 2bn is Q1

◼

Orders from major customer are

expected to increase in H2

◼

Although tightness in chip supply is

expected to continue, the Automotive

sales forecast was also revised up by

JPY 3bn due to the reduction of

downside risk via long-term supply

agreements

(JPY billion) Amount

%

Sales

254.0 280.0 ＋26.0 ＋10%

Mobile (US/Euro)

47.0

69.0 ＋22.0

＋47%

Mobile (China/Other)

34.0

35.0 ＋1.0

＋3%

Automotive

103.0

106.0 ＋3.0

＋3%

Non-Mobile

70.0

0.0 ＋0%

Sales

excl. Mobile (US/Euro)

207.0

211.0 ＋4.0

＋2%

(JPY billion) Amount

%

Sales

341.7

280.0 -61.7

-18%

Mobile (US/Euro)

162.6

69.0 -93.6

-58%

Mobile (China/Other)

34.9

35.0 ＋0.1

＋0%

Automotive

88.1

106.0 ＋17.9

＋20%

Non-Mobile

56.2

70.0 ＋13.8

＋25%

(14)

FY22/3 Q2 Sales & Operating Income Forecast

◼

In H1, Mobile (US/Euro) sales are

forecast to decline significantly, taking

total sales down 33% YOY (JPY 199.8

bn -> JPY 134.0B). Mobile (China/

Other), Automotive, & Non-Mobile

forecast to increase due to strong

demand

◼

Due to the sales decrease, H1

operating loss is forecast to grow

YoY, but improve by JPY 2.0bn (JPY

-9.9bn -> JPY -7.9 bn) YOY when

excluding the chip shortage impact

◼

The Q2 operating loss will increase

from Q1 due to temporary factors such

as higher chip prices, but input price

increases will be broadly passed on to

selling prices from Q3. Keeping target

of Q4 Positive EBITDA

(JPY billion)

Amount

%

Sales

199.8

134.0 -65.8 -33%

Mobile (US/Euro)

118.6

39.4 -79.2

-67%

Mobile (China/Other)

15.4

18.7 ＋3.3

＋21%

Automotive

38.8

45.9 ＋7.1

＋18%

Non-Mobile

27.0

30.0 ＋3.0

＋11%

Operating Income

(9.9)

(13.9)

-4.0

Sales

excl. chip shortage impact

199.8

149.8 -50.0 -25%

(9.9)

(7.9)

＋2.0

(JPY billion)

Amount

%

Sales

111.8

68.0 -43.8 -39%

Mobile (US/Euro)

63.1

18.0 -45.1

-71%

Mobile (China/Other)

9.1

10.0 ＋0.9

＋10%

Automotive

24.1

25.0 ＋0.9

＋4%

Non-Mobile

15.5

15.0 -0.5

-3%

Operating Income

(2.9)

(8.0)

-5.1

Sales

111.8

75.0 -36.8 -33%

(2.9)

(5.1)

-2.2

FY22/3 Q2

(FCST)

YoY

Op. Income

FY21/3 Q2

(ACT)

FY22/3 H1

(FCST)

YoY

Op. Income

◆Q2 (3M)

◆H1 (6M)

(15)

(16)

Quarterly Sales by Product

14.8

24.1

24.0

25.3

20.9

11.5

15.5

15.0

14.1 _15.0

6.3

9.1 _8.5

11.0

8.7

55.4

63.1

25.3

18.7

21.4

88.0

111.8

72.7 _69.2

66.0 FY20 1Q

FY20 2Q

FY20 3Q

FY20 4Q

FY21 1Q

Mobile (US/Euro)

Mobile (China/Other)

Non-Mobile

Automotive

(17)

Operating Income +/- Factors

FY20 4Q

(7.6)

Sales 69.2

FY21 1Q

(5.9)

Sales 66.0

（JPY billion）

FY22/3 Q1 Operating Income +/- Factors（QoQ）

Manufacturing

Fixed Cost

SG&A

Other

Operating

Loss

Operating

Loss

Shipment

Vol. &

Product Mix

✔ Lower depreciation cost due to

(18)

Consolidated B/S

* Incorporating Ichigo's exercise of the 12th Stock Acquisition Rights on July 30, 2021, the equity ratio is 20.3%.

Note. Difference in balances of “cash & equivalents” in cash flow statement and “cash and deposits” in balance sheet as of the end of FY21/3 Q3 is 0.3 billion yen in deposits paid.

*

(JPY billion)

FY21/3

Q1

FY21/3

Q4

FY22/3

Q1

YoY

QoQ

　Cash and deposits

45.2

55.7

44.7 -0.5

-11.0

Accounts receivable - trade

38.2

31.2

32.8 -5.4

＋1.6

Accounts receivable - other

36.0

15.3

18.8 -17.2

＋3.5

Inventories

47.1

39.7

43.6 -3.5

＋3.8

Other

7.3

4.3

4.7 -2.5

＋0.4

Total current assets

173.7

146.3

144.6 -29.1

-1.7

Total non-current assets

157.0

78.7

78.6 -78.5

-0.1

Total Assets

330.8

225.0

223.2 -107.6

-1.8

Accounts payable - trade

60.0

37.4

42.6 ＋17.5

-5.1

Interest-bearing debt

97.5

97.1

97.2 ＋0.3

＋0.0

Advances received

82.6

1.9

4.9 ＋77.7

-3.0

Other liabilities

53.6

46.7

38.0 ＋15.5

＋8.7

Total Liabilities

293.6

183.2

188.7 ＋104.9

-5.6

Total Net Assets

37.1

41.8

34.4 ＋2.7

＋7.4

(19)

Consolidated P&L

(JPY billion)

FY21/3

Q1

FY21/3

Q4

YoY

QoQ

Sales

88.0

69.2

66.0 -22.0

-3.2

Cost of sales

_87.0

_68.9

64.6 -22.4

-4.3

Gross Profit (Loss)

1.0

0.2

1.4 ＋0.4

＋1.1

SG&A

8.0

7.8

7.3 -0.8

-0.6

Operating Income (Loss)

_(7.0)

_(7.6)

(5.9)

＋1.1

＋1.7

Net non-op. income (expenses)

(1.8)

0.9 (0.5)

＋1.3

-1.4

Ordinary Income (Loss)

(8.8)

(6.7)

(6.4)

＋2.4

＋0.3

Net extraordinary income (loss)

(7.2)

(13.0)

(0.3)

＋6.9

＋12.7

Income (Loss) Before Income Taxes

(16.0)

(19.7)

(6.7)

＋9.3

＋13.0

Net Income (Loss)

(16.3)

(19.8)

(7.0)

＋9.3

＋12.8

EBITDA

(3.2)

(4.7)

(3.7)

-0.5

＋1.0

Avg. FX rate (JPY/USD)

107.6

106.1

109.5 Q-End FX rate (JPY/USD)

_107.7

_110.7

110.6

(20)

Consolidated Cash Flow Statement

Free Cash Flow = Cash Flow from Operating Activities less Capex (Purchase of non-current assets)

(JPY billion)

FY21/3

Q1

FY21/3

Q4

FY22/3

Q1

YoY

QoQ

Income before income taxes

(16.0)

(19.7)

(6.7)

＋9.3

＋13.0

Dep. & Amort.

4.4

2.9

2.2 -2.2

-0.8

Working capital

7.5 (6.2)

(4.4)

-11.9

＋1.8

Advances received

(6.5)

(0.5)

3.0 ＋9.5

＋3.5

Structural reform cost

7.7

0.0

0.0 -7.7

-0.0

Other

(12.1)

6.1 (2.8)

＋9.3

-8.9

Cash Flow from Operating Activities

(15.0)

(17.4)

(8.7)

＋6.4

＋8.7

Purchase of non-current assets

(2.2)

(1.0)

(2.3)

-0.1

-1.4

Other

(0.9)

(0.4)

0.1 ＋1.0

＋0.5

Cash Flow from Investing Activities

(3.1)

(1.4)

(2.2)

＋1.0

-0.8

Cash Flow from Financing Activities

(3.3)

19.1 (0.3)

＋2.9

-19.4

Ending Balance, Cash & Equiv.

44.9

55.3

44.4 -0.6

-11.0

(21)

THANK YOU

Any information related to market trends or industries mentioned in this document is based on information available at present and JDI does not guarantee that this information is accurate or complete.